Sarah Q. Duffy

As managed care has grown, much concern has been expressed about the potential plight of the nation’s 125 academic health centers (AHCs). Less concern has focused on non-AHC teaching hospitals, although most studies of graduate medical education (GME) costs include these hospitals in their estimates. While most studies have found that costs increase positively with various measures of “teaching intensity,” some have concluded that hospitals with smaller programs have costs that are the same or less than comparable nonteaching hospitals. However, few studies have tested whether AHCs’ cost structures are sufficiently similar to those of other hospitals to reliably include them in the same estimation. This article tests that assumption for Maryland hospitals, finds it violated, and presents results for non-AHC teaching hospitals. The results reveal that, at least in Maryland, even small teaching programs add to hospital costs.